Simon Property Group 3rd-quarter FFO Improves

INDIANAPOLIS (AP) — Simon Property Group Inc. said Friday that its funds from operations improved in the third quarter on lowered expenses even as occupancy levels slipped.

Occupancy at regional malls fell to 91.4 percent from 92.5 percent during the quarter, while premium outlet center occupancy dropped to 97.5 percent from 98.8 percent.

The real estate investment trust tried to make some of this up by charging more rent per square foot. The REIT also lowered its operating expenses to $532.8 million from $552.2 million.

Simon Property said FFO grew to $473.1 million, or $1.38 per share, from $463.9 million, or $1.61 per share, during the same period a year ago.

FFO, a widely used gauge of real estate operating performance, adds depreciation and amortization expenses, as well as other non-operating items, back to net income.

Analysts polled by Thomson Reuters forecast FFO of $1.32 per share.

Net income for the three months ended Sept. 30 declined 7 percent to $105.5 million, or 38 cents per share, compared with $112.9 million, or 50 cents per share, a year earlier.

Revenue dipped 1 percent to $924.9 million from $935.6 million. Minimum rent revenue improved, but the company made less from overage rent and reimbursed tenants more in the quarter.

Simon boosted the low end of its full-year FFO forecast. It now expects FFO of $5.40 to $5.50 per share for the year, up from a range of $5.35 to $5.50 per share.

Analysts predict 2009 FFO of $5.43 per share.